Correlation Between ZIM Integrated and BW LPG
Can any of the company-specific risk be diversified away by investing in both ZIM Integrated and BW LPG at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining ZIM Integrated and BW LPG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ZIM Integrated Shipping and BW LPG, you can compare the effects of market volatilities on ZIM Integrated and BW LPG and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in ZIM Integrated with a short position of BW LPG. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZIM Integrated and BW LPG.
Diversification Opportunities for ZIM Integrated and BW LPG
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ZIM and BWLLY is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding ZIM Integrated Shipping and BW LPG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BW LPG and ZIM Integrated is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on ZIM Integrated Shipping are associated (or correlated) with BW LPG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BW LPG has no effect on the direction of ZIM Integrated i.e., ZIM Integrated and BW LPG go up and down completely randomly.
Pair Corralation between ZIM Integrated and BW LPG
Considering the 90-day investment horizon ZIM Integrated Shipping is expected to generate 1.26 times more return on investment than BW LPG. However, ZIM Integrated is 1.26 times more volatile than BW LPG. It trades about 0.12 of its potential returns per unit of risk. BW LPG is currently generating about 0.04 per unit of risk. If you would invest 578.00 in ZIM Integrated Shipping on September 3, 2024 and sell it today you would earn a total of 1,403 from holding ZIM Integrated Shipping or generate 242.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 63.97% |
| Values | Daily Returns |
ZIM Integrated Shipping vs. BW LPG
Performance |
| Timeline |
| ZIM Integrated Shipping |
| BW LPG |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ZIM Integrated and BW LPG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZIM Integrated and BW LPG
The main advantage of trading using opposite ZIM Integrated and BW LPG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZIM Integrated position performs unexpectedly, BW LPG can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in BW LPG will offset losses from the drop in BW LPG's long position.| ZIM Integrated vs. Golden Ocean Group | ZIM Integrated vs. Genco Shipping Trading | ZIM Integrated vs. Global Ship Lease | ZIM Integrated vs. Diana Shipping |
| BW LPG vs. Kawasaki Kisen Kaisha | BW LPG vs. Pacific Basin Shipping | BW LPG vs. Hapag Lloyd Aktiengesellschaft | BW LPG vs. Hapag Lloyd Aktiengesellschaft |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |